Farm Credit Administration § 617.7610

information is necessary. Once FCA § 617.7605 How should System institu- has received sufficient information, it tions document whether the bor- must decide whether to issue a direc- rower had the financial resources tive as originally proposed or as modi- to avoid foreclosure? fied. The right of first refusal applies only to borrowers who did not have the fi- § 617.7520 How does the FCA issue a nancial resources to avoid foreclosure directive and when will it be effec- or voluntary conveyance. A System in- tive? stitution must clearly document in its A distressed loan restructuring direc- files whether the borrower had the re- tive is effective immediately on receipt sources to avoid foreclosure or vol- by the qualified lender, or on such later untary conveyance. date as may be specified by FCA, and will remain effective and enforceable § 617.7610 What should the System in- until it is stayed, modified, or termi- stitution do when it decides to sell nated by FCA. acquired agricultural real estate? (a) Notify the previous owner, § 617.7525 May FCA use other enforce- (1) Within 15 days of the System in- ment actions? stitution’s decision to sell acquired ag- FCA may issue a distressed loan re- ricultural real estate, it must notify structuring directive in addition to, or the previous owner, by certified mail, instead of, any other action allowed by of the property’s appraised fair market law, including cease and desist pro- value as established by an accredited ceedings, civil money penalties, or the appraiser and of the previous owner’s granting or conditioning of any appli- right to: cation or other requests by the System (i) Buy the property at the appraised institution. fair market value, or (ii) Offer to buy the property at a price less than the appraised value. Subpart G—Right of First Refusal (2) That any offer must be received § 617.7600 What are the definitions within 30 days of receipt of the notice. used in this subpart? (b) Act on an offer to buy the ac- quired agricultural real estate at the In addition to the definitions in appraised value. Within 15 days after § 617.7000, the following definitions the receipt of the previous owner’s apply to this subpart. offer to buy the acquired agricultural Acquired agricultural real estate or real estate at the appraised value, the property means agricultural real estate System institution must accept the acquired by a System institution as a offer and sell the property to the pre- result of a loan foreclosure or a vol- vious owner if the offer was received untary conveyance by a borrower who, within 30 days of the notice required in as determined by the institution, does paragraph (a)(2) of this section. not have the financial resources to (c) Act on an offer to buy the ac- avoid foreclosure. quired agricultural real estate at less Previous owner means: than the appraised value. (1) The prior record owner who was a (1) The System institution must con- borrower from a System institution sider the offer if it was received within and did not have the financial re- 30 days of the notice required in para- sources, as determined by the institu- graph (a)(2) of this section. tion, to avoid foreclosure on acquired (2) If the System institution accepts agricultural real estate; or this offer, it must notify the previous (2) The prior record owner who is not owner of the decision and sell the ac- a borrower and whose acquired agricul- quired agricultural real estate to the tural real estate was used as collateral previous owner within 15 days of re- for a loan to a System borrower. ceiving the offer to buy the acquired System institution means a Farm Cred- agricultural real estate at a value less it System institution, except a bank than the appraised value. for cooperatives, which makes loans as (3) If the System institution rejects defined in § 617.7000. this offer, it must notify the previous

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owner of the decision within 15 days of reject the offer to lease the property at receiving the offer to buy the acquired the appraised rental value when the in- agricultural real estate at a value less stitution determines that the previous than the appraised value. The previous owner: owner has 15 days from receipt of the (i) Does not have the resources avail- notice to submit an offer to buy at able to conduct a successful farming or such price or under such terms and ranching operation; or conditions. The System institution (ii) Cannot meet all the payments, may not sell the acquired agricultural terms, and conditions of such lease. real estate to any other person: (c) Act on an offer to lease the ac- (i) At a price equal to, or less than, quired agricultural real estate at a rate that offered by the previous owner; or that is less than the appraised rental (ii) On different terms or conditions value of the property. than those extended to the previous (1) The System institution must con- owner without first notifying the pre- sider the offer to lease the property at vious owner by certified mail and pro- a rate that is less than the appraised viding an opportunity to buy the prop- rental value of the property. Notice of erty at such price or under such terms the decision to accept or reject such and conditions. offer must be provided to the previous (d) For purposes of this section, fi- owner within 15 days of receipt of the nancing by the System institution is offer. not a term or condition of the sale of (2) If the System institution accepts acquired agricultural real estate. A the offer to lease the property at less System institution is not required to than the appraised rental value, it provide financing to the previous must notify the previous owner and owner for purchase of acquired agricul- lease the property to the previous tural real estate. owner. (3) If the institution rejects the offer, § 617.7615 What should the System in- the System institution must notify the stitution do when it decides to lease previous owner of this decision. The acquired agricultural real estate? previous owner has 15 days after re- (a) Notify the previous owner, ceipt of the notice in which to agree to (1) Within 15 days of the System in- lease the property at such rate or stitution’s decision to lease acquired under such terms and conditions. The agricultural real estate, it must notify System institution may not lease the the previous owner, by certified mail, property to any other person: of the property’s appraised rental (i) At a rate equal to or less than value, as established by an accredited that offered by the previous owner; or appraiser, and of the previous owner’s (ii) On different terms and conditions right to: than those that were extended to the (i) Lease the property at a rate equiv- previous owner without first informing alent to the appraised rental value of the previous owner by certified mail the property, or and providing an opportunity to lease (ii) Offer to lease the property at rate the property at such rate or under such that is less than the appraised rental terms and conditions. value of the property. (2) That any offer must be received § 617.7620 What should the System in- within 15 days of receipt of the notice. stitution do when it decides to sell (b) Act on an offer to lease the ac- acquired agricultural real estate at quired agricultural real estate at a rate a public auction? equivalent to the appraised rental System institutions electing to sell value of the property. or lease acquired agricultural real es- (1) Within 15 days after receipt of tate or a portion of it through a public such offer, the System institution may auction, competitive bidding process, accept the offer to lease the property or other similar public offering must: at the appraised rental value and lease (a) Notify the previous owner, by cer- the property to the previous owner, or tified mail, of the availability of such (2) Within 15 days after receipt of property. The notice must contain the such offer, the System institution may minimum amount, if any, required to

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